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In business, when a person invests and the other offers his services, it is called ___.

A. Musharakah
B. Mudarabah
C. Riba
D. Salam
Correct Answer: B. Mudarabah

In Islamic business, when one person invests capital and another offers their services and expertise, this partnership is known as Mudarabah. The capital provider (Rabb-ul-Maal) bears the financial risk, while the working partner (Mudarib) contributes labor and management. Profits are shared according to a pre-agreed ratio, and any losses are typically borne by the capital provider, unless caused by the Mudarib's negligence or misconduct.

  • Musharakah is a partnership where all partners contribute both capital and labor, sharing profits and losses.
  • Riba refers to interest or usury, which is prohibited in Islamic finance.
  • Salam is a contract where payment is made in advance for goods to be delivered at a future date.

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